Hi All!
Im confused with these issue:
How far is it true that a written bond has a legal value in India?
What is it meant for? Just to ensure mimimum commitment from the employee?
On what basis is the period of bond determined?
I work for a HR Placement firm... Will this bond be of any use to us?
Pls give me ur opinions.
Thanks,
Vasudha.
From India, Madras
Im confused with these issue:
How far is it true that a written bond has a legal value in India?
What is it meant for? Just to ensure mimimum commitment from the employee?
On what basis is the period of bond determined?
I work for a HR Placement firm... Will this bond be of any use to us?
Pls give me ur opinions.
Thanks,
Vasudha.
From India, Madras
Hi,
The Bond you are referring to is the "employment bond". It is a contract made in addition to the terms and conditions of employment between the employer and employee under conditions when the employer either offers special training to the employee by investing/spending substantial amount of money to enhance the employee's competence per se' and utility to the company, or defrays special expenses in deputation abroad etc.
The employer will have done some thing that he does not normally do for any regular employee. Therefore the employer feels (and probably is ) justified to get appropriate contributions by way value addition from the employee and insists therefore that the employee serve the company and does not leave employment for a defined period (within which the employer feel the money invested would have been recovered adequately).
There cannot be any arithmetically accurate formula to decide the period for which the employee may not leave employment and the value of the bond he may be required to sign. It should be reasonable and be seen by the courts as such if there be any litigation in the matter. However, the amount has a basis on the lower side (equivalent to the money actually spent by the employer to enhance the employee's competence and utitliy to the company) and this amount will be built up higher depending the perceptions of the employer of the value that may be lost instead of gained if the employee leaves employment mid-way!
The experience tells that :
1) It is uneconomical (cost-wise) to enforce the bond. (Lawyers may end up earning more that the bond value!!!)
2) It is time consuming.
3) It is at best a psychological deterrent.
Even so if this has to be done then please remember that the bond should be balanced. Both parties must enjoy even rights/obligations. (This the lawyers would advise well.) And it is sometimes necessary to make an example so that others become aware of the consequences.
Whether a bond would be useful for a placement company is a matter I refrain to comment, but many employers demand that the employees must give them some definite period performance!
I trust you have seen adequate facets of the issue!
Regards
samvedan
September 6, 2006
From India, Pune
315The Bond you are referring to is the "employment bond". It is a contract made in addition to the terms and conditions of employment between the employer and employee under conditions when the employer either offers special training to the employee by investing/spending substantial amount of money to enhance the employee's competence per se' and utility to the company, or defrays special expenses in deputation abroad etc.
The employer will have done some thing that he does not normally do for any regular employee. Therefore the employer feels (and probably is ) justified to get appropriate contributions by way value addition from the employee and insists therefore that the employee serve the company and does not leave employment for a defined period (within which the employer feel the money invested would have been recovered adequately).
There cannot be any arithmetically accurate formula to decide the period for which the employee may not leave employment and the value of the bond he may be required to sign. It should be reasonable and be seen by the courts as such if there be any litigation in the matter. However, the amount has a basis on the lower side (equivalent to the money actually spent by the employer to enhance the employee's competence and utitliy to the company) and this amount will be built up higher depending the perceptions of the employer of the value that may be lost instead of gained if the employee leaves employment mid-way!
The experience tells that :
1) It is uneconomical (cost-wise) to enforce the bond. (Lawyers may end up earning more that the bond value!!!)
2) It is time consuming.
3) It is at best a psychological deterrent.
Even so if this has to be done then please remember that the bond should be balanced. Both parties must enjoy even rights/obligations. (This the lawyers would advise well.) And it is sometimes necessary to make an example so that others become aware of the consequences.
Whether a bond would be useful for a placement company is a matter I refrain to comment, but many employers demand that the employees must give them some definite period performance!
I trust you have seen adequate facets of the issue!
Regards
samvedan
September 6, 2006
From India, Pune
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Indemnity Bond - Format.doc
Bond in employment.pdf